- Total revenue grew 54% to $109 million, including surgical
revenue growth of 55%
- EOS revenue grew to $15 million
- Adjusted EBITDA margin improved 1,080 basis points
year-over-year
Alphatec Holdings, Inc. (Nasdaq: ATEC), a provider of innovative
solutions dedicated to revolutionizing the approach to spine
surgery, today announced financial results for the quarter ended
March 31, 2023, and recent corporate highlights.
First-Quarter 2023 Financial
Results
Quarter Ended March 31, 2023
Total revenue
$109 million
GAAP gross margin
65%
Non-GAAP gross margin
72%
GAAP operating expenses
$111 million
Non-GAAP operating expenses
$93 million
GAAP operating loss
($40) million
Adjusted EBITDA
($5) million
Ending cash balance
$117 million
Recent Highlights
- Extended momentum of PTPTM (Prone TransPsoas) procedure, the
strongest contributor to Q1 revenue growth;
- Advanced lateral sophistication with full commercial release of
LTPTM (Lateral TransPsoas) procedure;
- Introduced ATEC AIS (Adolescent Idiopathic Scoliosis) Approach,
with adaptable InVictusTM instrumentation designed to streamline
and optimize de-rotation;
- Drove 40% increase in surgical volume and 11% increase in
average revenue per procedure;
- Acquired navigation-enabled robotics platform to enhance
precision of ATEC’s procedural strategy.
“We continue to execute against our mission to revolutionize the
approach to spine surgery,” said Pat Miles, Chairman and Chief
Executive Officer. “As many in our industry capitulate, or seek to
drive growth through acquired revenues, ATEC is content to be the
outlier: methodically applying our 100% spine focus and unmatched
know-how to integrate and evolve technologies that improve the
predictability and reproducibility of spine care. ATEC's innovation
is not only driving rapid adoption today, it will also set new
clinical standards for years to come.”
Financial Outlook for the Full-Year 2023
The Company continues to expect total revenue to grow 28% to
$450 million for the fiscal year ended December 31, 2023, in line
with expectations shared in conjunction with the release of
preliminary first-quarter financial results. This includes surgical
revenue growth of approximately 30% and $57 million of EOS revenue.
The Company continues to expect to achieve non-GAAP adjusted EBITDA
break-even for the full-year 2023.
Financial Results Webcast
ATEC will present these results via a live webcast today at 1:30
p.m. PT / 4:30 p.m. ET. The live webcast can be accessed by
visiting the Investor Relations Section of ATEC’s Corporate
Website.
To dial in to the webcast, please register via this link.
A replay of the webcast will remain available through the
Investor Relations Section of ATEC’s Corporate Website for twelve
months. In addition, a dial-in replay will be available beginning
about two hours after the webcast’s completion through May 11,
2022. Access the replay by dialing (800) 770-2030 and referencing
conference ID number 97241.
Non-GAAP Financial Information
To supplement the Company’s financial statements presented in
accordance with generally accepted accounting principles in the
United States of America (GAAP), the Company reports certain
non-GAAP financial measures, including non-GAAP gross margin,
non-GAAP operating expenses, non-GAAP operating loss, and non-GAAP
adjusted EBITDA. The Company believes that these non-GAAP financial
measures provide investors with an additional tool for evaluating
the Company's core performance, which management uses in its own
evaluation of continuing operating performance, and a baseline for
assessing the future earnings potential of the Company. The
Company’s non-GAAP financial measures may not provide information
that is directly comparable to that provided by other companies in
the Company’s industry, as other companies in the industry may
calculate non-GAAP financial results differently, particularly
related to non-recurring, unusual items. Non-GAAP financial results
should be considered in addition to, and not as a substitute for,
or superior to, financial measures calculated in accordance with
GAAP. Included below are reconciliations of the non-GAAP financial
measures to the comparable GAAP financial measures.
About Alphatec Holdings, Inc.
ATEC, through its wholly owned subsidiaries, Alphatec Spine,
Inc., EOS imaging S.A. and SafeOp Surgical, Inc., is a medical
device company dedicated to revolutionizing the approach to spine
surgery through clinical distinction. ATEC’s Organic Innovation
MachineTM is focused on developing new approaches that integrate
seamlessly with the Company’s expanding AlphaInformatiX Platform to
better inform surgery and more safely and reproducibly achieve the
goals of spine surgery. ATEC’s vision is to be the Standard Bearer
in Spine. For more information, visit us at www.atecspine.com.
Forward Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainty. Such statements are based on
management's current expectations and are subject to a number of
risks and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements.
The Company cautions investors that there can be no assurance that
actual results will not differ materially from those projected or
suggested in such forward-looking statements as a result of various
factors. Forward-looking statements include, but are not limited
to: references to the Company’s revenue, balance sheet, growth and
financial outlook; planned product launches and introductions; and
the Company’s ability to compel surgeon adoption. Important factors
that could cause actual operating results to differ significantly
from those expressed or implied by such forward-looking statements
include, but are not limited to: the uncertainty of success in
developing new products or products currently in the pipeline; the
uncertainties in the Company’s ability to execute upon its
strategic operating plan; the uncertainties regarding the ability
to successfully license or acquire new products, and the commercial
success of such products; failure to achieve acceptance of the
Company’s products by the surgeon community; failure to obtain FDA
or other regulatory clearance or approval or unexpected or
prolonged delays in the process; continuation of favorable
first-party reimbursement; unanticipated expenses or liabilities or
other adverse events affecting cash flow or the Company’s ability
to achieve profitability; uncertainty of additional funding;
product liability exposure; an unsuccessful outcome in any
litigation; patent infringement claims; claims related to the
Company’s intellectual property; and the Company’s ability to meet
its financial obligations. A further list and description of these
and other factors, risks and uncertainties can be found in the
Company's most recent annual report, and any subsequent quarterly
and current reports, filed with the Securities and Exchange
Commission. ATEC disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events, or otherwise, unless required by
law.
Alphatec Holdings,
Inc.
Condensed Consolidated
Statements of Operations
(in thousands, except per
share amounts)
Three Months Ended
March 31,
2023
2022
(unaudited) Revenue: Revenue from products and services
$
109,110
$
70,918
Revenue from international supply agreement
—
15
Total revenue
109,110
70,933
Cost of sales
38,685
21,717
Gross profit
70,425
49,216
Operating expenses: Research and development
13,260
9,722
Sales, general and administrative
91,262
69,471
Litigation-related expenses
3,192
7,532
Amortization of acquired intangible assets
2,883
2,230
Transaction-related expenses
—
120
Restructuring expenses
175
1,370
Total operating expenses
110,772
90,445
Operating loss
(40,347
)
(41,229
)
Interest and other expense, net: Interest expense, net
(3,874
)
(1,456
)
Other (expense) income, net
706
(30
)
Total interest and other expense, net
(3,168
)
(1,486
)
Net loss before taxes
(43,515
)
(42,715
)
Income tax (benefit) provision
14
(99
)
Net loss
$
(43,529
)
$
(42,616
)
Net loss per share, basic and diluted
$
(0.40
)
$
(0.43
)
Weighted average shares outstanding, basic and diluted
109,751
99,978
Stock-based compensation included in: Cost of sales
$
6,006
$
256
Research and development
1,317
972
Sales, general and administrative
9,139
8,956
$
16,462
$
10,184
ALPHATEC HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands) March 31,2023 December
31,2022
(unaudited)
ASSETS Current assets: Cash and cash equivalents
$
116,698
$
84,696
Accounts receivable, net
62,415
60,060
Inventories
108,242
101,521
Prepaid expenses and other current assets
11,798
9,357
Total current assets
299,153
255,634
Property and equipment, net
109,750
101,952
Right-of-use assets
28,063
28,360
Goodwill
47,924
47,367
Intangible assets, net
81,079
82,781
Other assets
3,724
4,874
Total assets
$
569,693
$
520,968
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities: Accounts payable
$
39,070
$
34,742
Accrued expenses and other current liabilities
69,032
72,382
Contract liabilities
13,938
11,956
Short-term debt
16,068
14,948
Current portion of operating lease liabilities
4,796
4,842
Total current liabilities
142,904
138,870
Total long-term liabilities
461,548
393,162
Redeemable preferred stock
23,603
23,603
Stockholders' (deficit) equity
(58,362
)
(34,667
)
Total liabilities and stockholders' (deficit) equity
$
569,693
$
520,968
Alphatec Holdings, Inc. Reconciliation of Non-GAAP
Financial Measures (in thousands) Three Months
Ended March 31,
2023
2022
(unaudited) Gross profit, GAAP
$
70,425
$
49,216
Add: amortization of intangible assets
220
-
Add: stock-based compensation
6,006
256
Add: purchase accounting adjustments on acquisitions
195
-
Add: excess and obsolete write-down
2,098
1,706
Non-GAAP gross profit
$
78,944
$
51,178
Gross margin, GAAP
64.5
%
69.4
%
Add: amortization of intangible assets
0.2
%
0.0
%
Add: stock-based compensation
5.5
%
0.4
%
Add: purchase accounting adjustments on acquisitions
0.2
%
0.0
%
Add: excess and obsolete write-down
1.9
%
2.4
%
Non-GAAP gross margin
72.3
%
72.1
%
Three Months Ended March 31,
2023
2022
(unaudited) Operating expenses, GAAP
$
110,772
$
90,445
Adjustments: Stock-based compensation
(10,456
)
(9,928
)
Litigation-related expenses
(3,192
)
(7,532
)
Amortization of intangible assets
(2,883
)
(2,230
)
Transaction-related expenses
-
(120
)
Restructuring expenses
(175
)
(1,370
)
Other non-recurring expenses1
(1,349
)
-
Non-GAAP operating expenses
$
92,717
$
69,265
Three Months Ended March 31,
2023
2022
(unaudited) Operating loss, GAAP
$
(40,347
)
$
(41,229
)
Depreciation
8,589
7,085
Amortization of intangible assets
3,103
2,230
EBITDA
(28,655
)
(31,914
)
Add back significant items: Stock-based compensation
16,462
10,184
Purchase accounting adjustments on acquisitions
195
-
Excess & obsolete write-down
2,098
1,706
Litigation-related expenses
3,192
7,532
Transaction-related expenses
-
120
Restructuring expenses
175
1,370
Other non-recurring expenses1
1,349
-
Adjusted EBITDA
$
(5,184
)
$
(11,002
)
1
Non-recurring consulting fees associated with the implementation of
our state tax-planning strategy
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005511/en/
Investor/Media Contact: Tina Jacobsen, CFA Investor
Relations (760) 494-6790 investorrelations@atecspine.com
Company Contact: J. Todd Koning Chief Financial Officer
investorrelations@atecspine.com
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